I would imagine that most of our readers will instantly know
the first and last names, and if you don't recognize the middle
name immediately, it will probably only require a slight tap
to jog your memory.

Each of these three individuals owns a personal brand.
Personal brands are extremely valuable because they
allow people to transfer their reputations to every venture
to which they lend their name. Someone's personal brand can
give everything they do or that is done in association with
their name an instant presumption of credibility as well as
immediate access to media visibility. This kind of transfer
of reputation extends beyond individuals that are media
celebrities to those that have achieved past successes in
their business and professional careers.

All three individuals have something in common--they have
each faced recent crises and allegations regarding their
actions which have threatened to destroy their brand and
its associated value. The stakes are huge. How they deal
with these crises and communicate with the public will have
serious long term repercussions for the value of their brand.

Martha Stewart is an obsessive perfectionist and former
stock broker that created an empire centered around her
ability to show people how to live, dress, cook, and
decorate with style. She is a paragon of homemaking.
Ms. Stewart not only faces allegations of insider stock
trading, but even more seriously, she faces allegations
of lying to government investigators and taking
actions to cover up and obfuscate her wrong doings.
Ms. Stewart denies the allegations.

Before we discuss Ms. Stewart in further detail, lets take
a look at Mr. Flatley and Mr. Sosa. Mr. Flatley is the
Irish toe tapping dance star who initially gained fame
through the Riverdance production. A woman, and (notably)
her plaintiff's attorney, have alleged that Mr. Flatley
raped her at a hotel in Las Vegas. Mr. Flatley denies the
allegations, while admitting to having had consensual sexual
relations with the woman at the hotel.

Two months after the woman and Mr. Flatley spent the night
together, the woman's plaintiff's lawyer reportedly contacted
Mr. Flatley's attorney, saying she would tell the public Mr.
Flatley had raped her if he did not pay her. Mr. Flatley
declined to pay off the woman, and contacted the FBI to
conduct an investigation. The woman then filed a $35 million
lawsuit against Flatley, and he responded by filing a $100 million
lawsuit against the woman (presumably for defamation and
attempted extortion). According to an Associated Press story
(http://www.cbsnews.com/stories/2003/03/07/entertainment/main543094.shtml)
"We filed the lawsuit because what this lady did was
outrageous," said [Flatley's] lawyer, Burt Fields. "It will
do tremendous damage to Mr. Flatley. Even when he wins the
case, some people will still believe the accusations."

Of course, I have no way of knowing what really happened
between Mr. Flatley and the woman making the allegations.
The woman may be telling the truth, or she may be intentionally
committing fraud, or she may be mentally ill (and therefore
possibly believe that she is telling the truth when in fact
she is not). But regardless of the veracity of the allegations,
every aspect of how the plaintiff's attorney has acted, and
how Mr. Flatley has conducted himself in response, lends
credibility to Mr. Flatley's assertion that he has been
falsely accused and defamed.

If the allegations are false, then it would be equitable to see
Mr. Flatley recover significant damages from the woman who is
making the accusations. It would discourage others from attempting
extortion based on false claims. If it can be shown that the
woman's attorney is knowingly assisting her in making a fraudulent
claim, then it would also be fitting for her attorney to pay
damages as well as face disbarment. There are, unfortunately, more
than a few unethical plaintiff's attorneys that will not hesitate
to inflict harm and distress on others in the name of helping their
"injured client." An attorney that goes beyond "zealous
representation" to knowingly assist and encourage a client in
pursuing a fraud is indulging in pure greed aimed at stealing from
and injuring others.

My sense is that Mr. Flatley has dealt with the situation
in a manner that should minimize the damage to his brand. Yet
it remains a risky proposition for Mr. Flatley--in a civil
lawsuit such as this one, the jury needs only reach a decision by
a "preponderance of the evidence" rather than by evidence "beyond
a reasonable doubt." When facing allegations of a sexual nature,
people often tend to mentally presume one is guilty until proven
innocent (and sometimes even after one is proven innocent). The
jury can make errors in deciding who is really telling the truth.
This is why, in addition to the embarrassing publicity and the
time commitments, many celebrities choose to settle nuisance
lawsuits rather than allow them to go to court. It takes a lot
of courage on behalf of the accused to stand up for their rights
and try to prove their innocence, especially when the allegations
are so horrific.

[Note added February 2005: Mr. Flatley's suit against his accuser's attorney alleged that the attorney had committed extortion, intentional infliction of emotional distress, defamation, fraud, and wrongful interference with business relations. While the rape suit against Flatley by his accuser was thrown out of court, a motion to dismiss the suit by Flatley against his accuser's attorney was denied, and the suit has been allow to proceed to trial. This article in The Reporter noted that the court held that lawyers may be subject not only to civil action, but to criminal liability for extortion if they make aggressive pre-litigation settlement demands that simply state the obvious.

The recent high profile case regarding allegations of sexual harassment made against FOX newsman Bill O'Reilly raised similar issues to the Michael Flatley case. O'Reilly also sued his accuser and her attorney for attempted extortion. This detailed analysis of the case by Jonna M. Spilbor came to the conclusion that even if the allegations made against Mr. O'Reilly were true, they likely did not constitute sexual harassment. Meanwhile, Mr. O'Reilly's suit against his accuser and her attorney for attempted extortion appeared to be very strong. Nonetheless, Spilbor recommended that O'Reilly pay off his accuser and settle the case, because continuing to litigate would hurt Mr. O'Reilly's brand more than the cost of paying the woman off. O'Reilly did end up settling the case, and speculation in the press estimated it cost him millions of dollars to do so. It is hard for one to view such a transfer of wealth as anything but a result of meretricious greed and a grossly wrongful failing of our legal system.]

Next we come to Sammy Sosa, baseball's Chicago Cubs slugger whose
claim to fame rests on his home run hitting records. Mr. Sosa was
caught using an illegal "corked" baseball bat which potentially
gave him a slight hitting advantage and threatened to taint his
entire career accomplishments.

Mr. Sosa immediately admitted to his wrongdoing. A subsequent
investigation found nothing to disprove his contention that it
was a one time mistake. Because he was up front about
admitting his wrongfulness to the public, Mr. Sosa will likely
weather this particular storm without too much long term damage
to his personal brand. Baseball fans seem to be rather
forgiving--some have noted that Mr. Sosa's brand has seemingly
endured a number of hits over the years. The story at:
http://www.bayarea.com/mld/mercurynews/sports/6028757.htm (free registration required to access this article)
examines the resiliency of Sosa's image and also makes
comparisons with none other than Martha Stewart, who we now
take a look at in further detail.

Ms. Stewart is now facing serious charges including insider
stock trading, falsification of evidence, defrauding investors,
and obstruction of a federal investigation. And, importantly,
these charges are being made by the United States government,
not a plaintiff's attorney. She is clearly in a difficult situation
without any attractive options. She faces felony convictions, up to
30 years in jail and fines of up to $2 million. A good discussion
of the facts of the Martha Stewart matter along with a clear
analysis of the seriousness of the charges is outlined in the
article "The Spin She's In" at: http://www.publicbroadcasting.net/kuhf/news.newsmain?action=article&ARTICLE_ID=507815

My sense is that at this point the potential fines are not Ms.
Stewart's greatest concern, given the strength of her finances.
And by agreeing to a plea settlement before she was indicted,
Ms. Stewart could likely have significantly reduced any potential
jail time to the point where it would probably not have been
intolerable (and one can hardly resist the temptation to think
about Martha using her time served to show us all how to
decorate a jail cell with style). But it is unlikely that a plea
agreement would have eliminated the felony conviction, and with
it, associated restrictions that would have prohibited Ms. Stewart
from serving as an officer or director of a public company
(including, of course, her namesake company, Martha Stewart Living
Omnimedia). Ms. Stewart may have felt that it was worth the risk
of a longer jail term to fight for the possibility of coming away
from the battle with her ability to protect her brand and run
her company intact.

The government is highly motivated to go after Ms. Stewart to
set an example. It is not the alleged insider stock trading that
likely has the prosecutors really angry--it is the alleged
obstruction of the investigation. If the government is
able to win a high-profile conviction, it sends a message loud
and clear that no one is able to lie to a government investigator
and get away with it. (If you are an American but not familiar
with 18 US Code 1001, Material Misrepresentation to the Federal
Government, you should familiarize yourself with the law--take
a look at: http://profs.lp.findlaw.com/collar/collar_8.html and http://www4.law.cornell.edu/uscode/18/1001.html.)

[Note added February 2005: Ms. Stewart ended up being convicted of the charges against her and serving a prison term while appealing the conviction.]

So, what can we learn about personal branding from a marketing
perspective? Michael Jordan and other highly respected public
figures have proven that personal names can become valuable
business assets. But unwanted repercussions are also possible.
I discussed this with Will Reynolds, who offers venture design
and strategic branding services through the Venrise Corporation.
When customers think about converting their personal name into
a company brand, he recommends caution and helps them look far
into the future. "It's important to explore the potential
positive or negative consequences of branding decisions and
craft strategic responses for many different developmental
scenarios," he said. "Organizational designers should think
like space engineers who attempt to avoid single points of
failure; Martha Stewart and her investors probably didn't
imagine that personal problems could so adversely affect the
company."

With the exception of legal firms or some other business
categories that are customarily named after the founders, it
is generally a poor idea to use personal names. Reynolds notes
that company brands named after people may not be easy to
protect as intellectual property and Internet domain names are
rarely available. He warns customers about a local mom and pop
perception that is often associated with the use of personal
names. And he said something else about organizational
structure and the design of corporate cultures. "A company that
is built with growth as an objective should shift power and
responsibility away from the top to competent members of the
management team. Many people who approach a company that is
named after the founder will not deal with anyone else even if
delegation is preferred."

More positively, Will Reynolds encourages company founders to
envision exit strategies and think about corporate life cycles.
"It's hard for some people to imagine the consequences of their
success when a company is being built. An established brand
can be a valuable factor in future acquisition or merger
negotiations." And he suggests that future acquirers may not
want to retain a corporate identity named after the founder when
he or she has left the company. He also asks founders how they
would feel if a new owner decides to keep the name. "Wise
entrepreneurs avoid emotional attachments that might inhibit
successful exit strategies and it is hard to walk away from a
company that carries your own name." How will Martha Stewart be
affected if circumstances force her out of the company and
someone else makes decisions that so explicitly relate to her
personal reputation? Or will a decision be made to change the
name and lose brand value that was growing before Martha became
a corporate public relations problem?

Choosing a company name is a critical decision that may
significantly impact an organization's chances for success.
When ego or capriciousness are used to select a name,
rather than driving decisions through use of a thorough
strategic process, the costs associated with unwanted or
unexpected repercussions are often significant.

Business IS Rocket Science. If you meticulously plan and
strategize key decisions just like a rocket scientist
would, you will maximize your opportunities and shape the
best possible future for your organization.